Toshiba not considering CVC offer

Toshiba Corp has decided against evaluating a $20 billion buyout offer from CVC Capital Partners, saying it lacked detail.

The Japanese conglomerate said a new letter from CVC, which previously offered to take the company private, did not provide the information needed for it to be able to evaluate the offer.

Instead, the company said the letter stated CVC “would step aside to await” Toshiba’s guidance.

“This letter contained no specific and detailed information capable of detailed evaluation,” Toshiba said. “As this preliminary proposal lacks the required information the board has concluded it is not possible to evaluate it.”

It was unclear whether CVC’s letter meant it was backing away from its earlier offer. A representative for CVC in Japan declined to comment.

A Toshiba source said the letter meant CVC’s proposal was unlikely to proceed further, as the fund’s offer was unsolicited to begin with.

CVC’s proposal had sparked a strong backlash from Toshiba managers, prompting them to lobby the government and its lenders against it.

Toshiba CEO Nobuaki Kurumatani resigned over the proposal from CVC, his former employer, amid criticism the offer, which promised to retain management, was partly designed to shield him from activist shareholders.

Toshiba said it would continue to consider and evaluate any credible offers. “But for now, being a publicly traded company provides a stable equity structure.”

It also denied that Toshiba’s current shareholder structure, with a large activist shareholder base, had aversely affected its corporate value.

Activist shareholders won a vote at an emergency meeting in March to establish an independent probe into whether management had previously pressured shareholders to support desired board nominations.